You might assume that subcontractors handle their own pension contributions. Whether the contractor needs to pay contributions depends on the subcontractor’s employment status and how they work in practice.
Enrolling Subcontractors into a Workplace Pension
You usually do not need to enrol genuinely self-employed subcontractors into your workplace pension. Likewise, you do not normally need to contribute towards their pension.
Genuinely self-employed people run their businesses and take responsibility for their profits and losses. Therefore, they normally arrange their own pension savings.
However, you may need to make pension contributions if any of your subcontractors meet the legal definition of a worker. In this situation, you must assess their eligibility under the normal workplace pension rules.
When a Subcontractor Counts as a Worker
A worker is someone who works under an employment contract or agrees to perform services personally. The definition can also cover people who work outside traditional employment contracts. For pension purposes, the question concerns the relationship between the individual and your business.
For example: Does the person genuinely operate an independent business or do they personally work as part of yours.
The Pensions Regulator considers the whole relationship rather than relying on one factor. Therefore, a self-employed label or an invoice does not settle the question.
Checking Employment Status
You should consider the following questions before you decide whether pension contributions apply:
- Can the subcontractor genuinely send another suitable person to complete the work? (Substitution)
- Who decides how, when and where the subcontractor carries out the work? (Control)
- Do both parties expect the business to offer work and the individual to accept it (Ongoing Work)
- Can the subcontractor make a profit or loss from the job? (Financial Risk)
- Does the subcontractor provide their own tools, equipment and insurance? (Equipment)
- Does the subcontractor work for other clients and negotiate their own prices? (Independence)
No single answer determines the outcome. For instance, a subcontractor may use your equipment for practical or safety reasons. This fact alone does not make them a worker.
However, several employee-style arrangements can point towards worker status. The risk increases when you control their hours and direct their work, while expecting a personal service.
You should also consider whether the relationship changes over time. A genuinely independent arrangement can develop into something much closer to employment.
HMRC’s CEST Tool
HMRC provides a free Check Employment Status for Tax tool, commonly called CEST. This tool can help you assess whether someone counts as employed or self-employed for tax purposes.
However, CEST does not provide a final answer about workplace pension rights. Tax law and employment law use different tests. Therefore, you should seek a separate employment status review when the pension position remains unclear.
Paying Pension Contributions to Subcontractors
Once someone qualifies as your worker, you must assess their age, earnings and UK working arrangements. You cannot assume that every worker qualifies for automatic enrolment.
For the 2026/27 tax year, employers must enrol workers who meet these conditions:
- The worker must usually work in the UK
- The worker must earn more than £10,000 annually
- The worker must fall between age 22 and State Pension age
Employers must assess earnings against the relevant pay period. Therefore, the annual figure does not replace the monthly or weekly earnings tests.
The standard minimum contribution totals 8% of qualifying earnings. The employer must normally contribute at least 3%, while the remaining 5% comes from the worker and tax relief. For 2026/27, the usual qualifying earnings band runs from £6,240 to £50,270 annually.
If a Worker Earns Less Than £10,000
Workers who do not qualify for automatic enrolment mat still have pension rights. For instance, some workers can ask to join a workplace pension and receive employer contributions. Alternatively, others can ask to join without receiving a compulsory employer contribution.
Their age and earnings determine which rights apply, so you should assess every worker rather than dismissing pension requests automatically.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.